National Highway Traffic Safety Administration (NHTSA), DOT.
This document adjusts certain civil penalties authorized for violations of odometer tampering and theft prevention statutes administered by the National Highway Traffic Safety Administration (NHTSA). The Federal Civil Monetary Penalty Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996, requires us to take this action at least every four years. The penalties that are increased were last adjusted in March 1997.
The final rule is effective September 6, 2001.Start Further Info Start Printed Page 41150
FOR FURTHER INFORMATION CONTACT:
Taylor Vinson, Office of Chief Counsel, NHTSA, telephone (202) 366-5263, facsimile (202) 366-3820, electronic mail “TVinson@nhtsa.dot.gov”, 400 Seventh Street, SW, Washington, DC 20590.End Further Info End Preamble Start Supplemental Information
In order to preserve the remedial impact of civil penalties and to foster compliance with the law, the Federal Civil Monetary Penalty Inflation Adjustment Act of 1990 ((“Adjustment Act”), 28 U.S.C. Sec. 2461 note, Pub. L. 101-410), as amended by the Debt Collection Improvement Act of 1996 (“Collection Act,” Pub. L. 104-134), requires us and other Federal agencies to regularly adjust certain civil penalties for inflation. Under these laws, each agency must make an initial inflationary adjustment for all applicable civil penalties, and must make further adjustments of these penalty amounts at least once every four years. The Collection Act limited the initial increase to 10 percent of the penalty being adjusted.
Our initial adjustment of civil penalties under these legislative authorities was published on February 4, 1997 (62 FR 5167). We established 49 CFR part 578, Civil Penalties, which applies to violations that occur on and after March 6, 1997. These adjustments resulted in the maximum permissible increases of 10 percent. On July 14, 1999, we further adjusted certain penalties to enhance their deterrent effect (64 FR 37876), effective August 13, 1999. As we are now at the end of the four-year period following the initial adjustment, we reviewed the penalties that have remained unchanged since 1997, and, on May 18, 2001, proposed adjusting those penalties where the statutory formulae authorize it (66 FR 27621). We received one comment on the proposal, from the National Automobile Dealers Association (NADA), which confirmed our methodology. NADA “expects these higher penalty figures will help to deter odometer and theft law violations and thus will help to protect dealers and their customers.”
Method of Calculation
Under the Adjustment Act as amended by the Collection Act, we determine the inflation adjustment for each applicable civil penalty by increasing the maximum civil penalty amount per violation by the cost-of-living adjustment, and then applying a rounding factor. Sec. 5(b) of the Adjustment Act defines the “cost-of-living” adjustment as:
“the percentage (if any) for each civil monetary penalty by which—
(1) the Consumer Price Index for the month of June of the calendar year preceding the adjustment exceeds
(2) the Consumer Price Index for the month of June of the calendar year in which the amount of such civil monetary penalty was last set or adjusted pursuant to law.”
Since the adjustment will be effective before December 31, 2001, the “Consumer Price Index [CPI] for the month of June of the calendar year preceding the adjustment” is the CPI for June 2000. This figure is 172.4. NHTSA's penalties were initially adjusted in February 1997 based on the CPI figure for June 1996, which was 156.7. The factor that we have used in calculating the increase, then, is 172.4 divided by 156.7, or 1.1001914, rounded to 1.1. Any calculated increase under this adjustment is then subject to a specific rounding formula set forth in Sec. 5(a) of the Adjustment Act. Under the formula:
Any increase shall be rounded to the nearest:
(1) multiple of $10 in the case of penalties less than or equal to $100;
(2) multiple of $100 in the case of penalties greater than $100 but less than or equal to $1,000;
(3) multiple of $1,000 in the case of penalties greater than $1,000 but less than or equal to $10,000;
(4) multiple of $5,000 in the case of penalties greater than $10,000 but less than or equal to $100,000;
(5) multiple of $10,000 in the case of penalties greater than $100,000 but less than or equal to $200,000; and
(6) multiple of $25,000 in the case of penalties greater than $200,000.
Review of Civil Penalties Prescribed by Section 578.6
Sec. 578.6 contains the civil penalties authorized by the statutes that we enforce. We have reviewed these penalties, multiplied each of them by 1.1, considered the nearest higher multiple specified in the rounding provisions, and concluded that only the penalties discussed below may be increased.
Sec. 578.6(f) Odometer tampering and disclosure. The maximum civil penalty for a related series of violations of 49 U.S.C. Chapter 327 is $110,000, as specified in Sec. 578.6(f)(1). The inflation factor raises this figure to $121,000. Under the formula, any increase in a penalty shall be rounded to the nearest multiple of $10,000 in the case of penalties greater than $100,000 but less than or equal to $200,000. Accordingly, we are amending Sec. 576.8(f)(1) to increase the maximum civil penalty to $120,000 for a related series of violations of the odometer tampering and disclosure provisions. However, the maximum civil penalty for a single violation remains at $2,200 because the inflation-adjusted figure of $2,420 is not yet at a level to be rounded to the nearest multiple of $1,000.
Sec. 578.6(g) Vehicle theft prevention. Under Sec. 578.6(g)(1), the maximum civil penalty for a related series of violations of 49 U.S.C. 33114(a)(1-4) is $275,000. The inflation factor raises this figure to $302,500. Under the formula, any increase in a penalty shall be rounded to the nearest multiple of $25,000 in the case of penalties greater than $200,000. Accordingly, we are amending Sec. 576.8(g)(1)to increase the maximum civil penalty to $300,000 for a related series of violations of the vehicle theft prevention provisions. However, the maximum penalty for a single violation remains at $1,100.
Under Sec. 578.6(g)(2), a person that violates 49 U.S.C. 33114(a)(5) is liable for a civil penalty of not more than $110,000 a day for each violation. The inflation factor modified by the rounding factor results in this penalty being raised to $120,000, and we are amending Sec. 578.6(g)(2) to reflect this adjustment as well.
The amendments are effective September 6, 2001. The adjusted penalties will apply to violations occurring on and after the effective date.
Rulemaking Analyses and Notices
Executive Order 12866 and DOT Regulatory Policies and Procedures
We have considered the impact of this rulemaking action under E.O. 12866 and the Department of Transportation's regulatory policies and procedures. This rulemaking document was not reviewed under E.O. 12866, “Regulatory Planning and Review.” This action is limited to the adoption of adjustments of certain civil penalties under statutes that the agency enforces, and has been determined to be not “significant” under the Department of Transportation's regulatory policies and procedures.
Regulatory Flexibility Act
We have also considered the impacts of this notice under the Regulatory Flexibility Act. I certify that this final rule will have no significant economic impact on a substantial number of small entities. The following is my statement providing the factual basis for the Start Printed Page 41151certification (5 U.S.C. Sec. 605(b)). The amendments primarily affect manufacturers of motor vehicles. Manufacturers of motor vehicles are generally not small businesses within the meaning of the Regulatory Flexibility Act.
The Small Business Administration's regulations define a small business in part as a business entity “which operates primarily within the United States.” (13 CFR 121.105(a)) SBA's size standards are organized according to Standard Industrial Classification Codes (SIC), SIC Code 3711 “Motor Vehicles and Passenger Car Bodies” has a small business size standard of 1,000 employees or fewer.
For manufacturers of passenger cars and light trucks, NHTSA estimates there are at most five small manufacturers of passenger cars in the U.S. Since each manufacturer serves a niche market, often specializing in replicas of “classic” cars, production for each manufacturer is fewer than 100 cars per year. Thus, there are at most 500 cars manufactured per year by U.S. small businesses.
In contrast, in 2001, there are approximately nine large manufacturers producing passenger cars, and light trucks in the U.S. Total U.S. manufacturing production per year is approximately 15 to 15 and a half million passenger cars and light trucks. We do not believe small businesses manufacture even 0.1 percent of total U.S. passenger car and light truck production per year.
Further, small organizations and governmental jurisdictions will not be significantly affected as the price of motor vehicles ought not to change as the result of this rule. As explained above, this action is limited to the adoption of a statutory directive, and has been determined to be not “significant” under the Department of Transportation's regulatory policies and procedures.
Finally, this action will not affect our civil penalty policy under the Small Business Regulatory Enforcement Fairness Act (62 FR 37115, July 10, 1997). We shall continue to consider the appropriateness of any civil penalty to the size of the business charged.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1980 (PL 96-511), we state that there are no requirements for information collection associated with this rulemaking action.
National Environmental Policy Act
We have also analyzed this rulemaking action under the National Environmental Policy Act and determined that it has no significant impact on the human environment.
Executive Order 12612 (Federalism)
We have analyzed this proposed rule in accordance with the principles and criteria contained in E.O. 12612, and have determined that it has no significant federalism implications to warrant the preparation of a Federalism Assessment.
Civil Justice Reform
This proposed rule does not have a retroactive or preemptive effect. Judicial review of a rule based on this proposal may be obtained pursuant to 5 U.S.C. § 702. That section does not require that a petition for reconsideration be filed prior to seeking judicial review.
Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare a written assessment of the cost, benefits and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of more than $100 million annually. Because this rule will not have a $100 million effect, no Unfunded Mandates assessment will be prepared.Start List of Subjects
List of Subjects in 49 CFR Part 578End List of Subjects Start Part
PART 578—CIVIL PENALTIESEnd Part Start Amendment Part
1. The authority citation forEnd Amendment Part Start Amendment Part
2. Section 578.6 is amended by revising the last sentence of paragraph (f)(1), the last sentence of paragraph (g)(1), and paragraph (g)(2) to read as follows:End Amendment Part
(f) Odometer tampering and disclosure. (1) * * * The maximum civil penalty under this paragraph for a related series of violations is $120,000.
(g) Vehicle theft prevention. (1) * * * The maximum penalty under this paragraph for a related series of violations is $300,000.
(2) A person that violates 49 U.S.C. 33114(a)(5) is liable to the United States government for a civil penalty of not more than $120,000 a day for each violation.
Issued on: August 1, 2001.
L. Robert Shelton,
[FR Doc. 01-19740 Filed 8-6-01; 8:45 am]
BILLING CODE 4910-59-P